Date: 12/18/2009
Final
Revenue Forecasts and TABOR Outlook
COMMITTEE ON LEGISLATIVE COUNCIL
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10:05 AM -- Call to Order
Speaker T. Carroll, vice chair, called the committee to order.
10:05 AM -- Revenue Forecasts and TABOR Outlook
Natalie Mullis, Chief Economist, Legislative Council Staff presented the Colorado Economic and Revenue Forecast dated December 18, 2009 (Attachment A). Ms. Mullis explained that while there have been gains in employment, there are still hard times ahead. She walked the committee through the forecast and pointed out Table 1, line 23, on page 3, which shows the shortfall of about $601 million for FY 2009-10. Ms. Mullis explained that the Governor's plan is not incorporated in this number and that it only includes current law. She stated that this new shortfall now causes the cumulative two-year shortfall to become about $1.5 billion rather than $1.3 billion. Ms. Mullis responded to questions from the committee on whether the number includes the senior property tax exemption that equals roughly $90 million.
10:15 AM
Ms. Mullis continued her presentation and pointed out on page 16 of the forecast that the Unemployment Insurance Trust Fund is expected to go negative in the next few months and that the state will need to borrow from the federal Unemployment Insurance Fund. A number of legislators asked if borrowing money would violate the state constitutional provision TABOR. Ms. Mullis said that she discussed this with the lawyers and they believe that it is allowed since it predates TABOR and is required by federal law.
10:18 AM
Jason Schrock, Legislative Council Staff, explained that he would be discussing severance taxes and federal mineral leasing revenue. He talked about the rebound in severance tax revenue, which increased by $31 million since the September forecast. Representative Balmer asked about the increase in production and other states. Mr. Schrock responded and talked about people moving to Pennsylvania due to the natural gas there. Senator Romer asked a question regarding the tax lag in Colorado and federal mineral leasing revenue. Mr. Schrock directed the committee to Table 9 on page 19 that shows the Federal Mining and Leasing Revenue Distributions. There was a question regarding limited gaming funds and the impact of Amendment 50.
10:29 AM
Ron Kirk, Legislative Council Staff, responded to the question and explained that limited gaming revenue has been rebounding and it is expected to rebound from a 16 percent decline. Representative Lambert asked what the expected amount to community colleges will be. Mr. Kirk explained that it is expected to be about $7 million, up from about $5 million in September. Senator Tapia asked when the community colleges will receive the money. Mr. Kirk said at the end of the fiscal year in 2010.